Home / Business and Economy / GIFT City Traders Opt for Prop Trading Over Clients
GIFT City Traders Opt for Prop Trading Over Clients
1 Jun
Summary
- Half of GAP license holders now focus solely on prop trading.
- A $10,000 quarterly fee cap significantly lowers prop trading costs.
- Prop firms gain direct global market access by bypassing intermediaries.
The Global Access Provider (GAP) license in GIFT City, initially intended to grant Indian investors overseas market access, is now predominantly utilized by brokers for proprietary trading. This evolution is spurred by a favorable fee structure, featuring a quarterly cap of $10,000 for prop trades, alongside a 20-year tax holiday. Currently, half of the GAP license holders are prop firms, leveraging the license to manage their own capital and bypass intermediary layers for direct global market access.
This strategic shift offers significant cost savings compared to servicing individual clients. For instance, a $20 billion quarterly turnover could incur a $1 million fee for client business, versus a mere $10,000 for prop trading due to the cap. The 20-year tax exemption on business income further enhances the appeal for prop firms with established operations in GIFT City. This flexibility and cost efficiency are making GIFT City an attractive hub for proprietary trading activities.
